E-commerce is real dotcom boom that India's witnessing [Financial Express (India)]
(Financial Express (India) Via Acquire Media NewsEdge) Tata Sons-promoted Infiniti Retail, which runs the electronics chain Croma, has ventured into e-commerce after completing five years of its brick-and-mortar operations. Cromaretail.com, the platform where consumers can shop for products, was launched on Monday in Mumbai. Ajit Joshi, chief executive officer and managing director of Infiniti Retail, spoke to FE's Sohini Mitter about Croma's new venture, its positioning in the e-commerce space, price wars, growth opportunities and challenges in online retail. Excerpts:
Has Croma's e-commerce foray been a little late?
We've successfully completed five years of operations and emerged as the most preferred retailer in the CDIT (consumer durables and tech products) category. There's a great demand for Croma products in tier-II and tier-III towns, but the lack of good real estate and distribution channels have barred us from setting up stores. NRIs, too, shop for their folks in India. We decided to cater to these set of customers. With e-commerce growing steadily and internet penetration increasing to suit retailers, our online shop has arrived at the right time.
There are several e-commerce sites selling a wide array of electronic goods. How does Croma differentiate itself from this clutter?
When we decided to go online, we were clear about two things. We're not a fly-by-night operator and didn't want to be a me-too website. Croma's online shop is not a deal site. Product pricing will be constant across our physical stores and e-platform. It's a myth that online shoppers look for cheap deals only. Our surveys show that trust and credibility drive online purchases and the Tata name resonates both. Cromaretail.com will also offer product-wise and category-wise shopping assistance in the form of expert tips and reviews. We aim to become a solutions provider from a retailer.
Do you see yourself losing out in price competitiveness, with sites like Flipkart and Letsbuy selling electronics at high discounts?
We have successfully followed the same strategy for our airport stores. Despite paying a premium rent, we don't overprice our products like other retailers do. Manufacturers like LG, Samsung and Nokia are unhappy with the heavy discounts offered by some sites. Croma's strength will be its after-sales service which most e-commerce platforms fail to offer. Price may determine some purchases, but that is in the minority.
Has it become imperative for retailers to have an online presence?
E-commerce, today, is absolutely essential for retailers. If the business is the body, brick and click are its two arms. There are a vast number of internet-literate customers who indulge in both online and offline shopping. A retailer can build a sustainable business model only by striking a balance between both formats. We achieved offline sales of R2,970 crore in five years and hope the online shop to do the same within a year and half.
What are the challenges and opportunities in e-commerce going forward?
E-commerce is the real dotcom boom that India's witnessing. The rise in internet literacy levels and the increased penetration of broadband are its biggest growth drivers. The challenge for e-commerce players is the inter-state taxes which play havoc with prices of products. Once GST becomes a reality, e-commerce will grow unhindered.
Copyright 2012 The Indian Express Online Media Pvt. Ltd., distributed by Contify.com
Credit: Sohini Mitter
(c) 2012 The Indian Express Online Media Pvt. Ltd., distributed by Contify.com
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